Use Data and Next-Gen Tools to Drive Digital Banking Transformation

As the pace of change in the banking industry accelerates, organizations are embracing the need for digital transformation initiatives that enable real-time delivery of insight and process improvements at speed and scale.

The banking industry is changing and evolving at a pace never before seen through the use of technology. While always a driver for progress, the adoption of new advances and practices has enabled financial institutions to connect and operate faster and more efficiently than ever before.

It’s a very exciting time to be a participant in these changes, but effectively understanding the value and impact they can have is critical to achieving successful digital user experiences. Financial institutions in particular are at a crossroads, where the convergence of technology and design can create new opportunities for refining and managing internal processes – providing exceptional user experiences for both staff members and customers.

Banking customers’ expectations have shifted as their experiences with other aspects of technology present new ways to interact with the world around them. These increased expectations are tied directly to how financial institutions need to think about their daily operations and interactions with customers on a global scale, with the financial services industry approaching a critical juncture in this progression.

Executives interested in delivering best-in-class services and experience need to focus their organizational efforts and continue to internalize a few important ideas for the coming year to best leverage an ever-expanding set of technology options. None of this is ‘breaking news’, but is worth another look as new trends continue to emerge, leading to additional decision-making opportunities.

Mitigating Gaps in Expectations

Your customers are constantly interacting with technology. Mobile devices are never far from them, and when they are, they can simply issue a voice command to Alexa to take care of a pressing need.

Entertainment, social interaction, commerce, and every other facet of human life has moved into the digital realm, and the experiences delivered in these parallel verticals are setting a high bar for the financial services industry to meet. Fail to delight your customers and provide a seamless interaction, and they will gravitate away from your business and to a competitor without a second thought–and potentially engage in a social media negativity campaign, the outcome of which can never fully be known.

Traditionally, great digital customer experiences have not been at the forefront of financial institutions’ concerns. This is due to a primary focus on interpersonal relationships, but also stemming from the need to often support legacy systems that run operations that don’t provide the scalability or flexibility to grow robust user experiences and services around them. These systems have been focused on internal-facing metrics for success, and the cost for making changes – and potentially negatively impacting business – has been too high to warrant experimentation.

However, smaller fintech firms are disrupting the market through inventive ideas around finance and the creation of great experiences that map directly to customer expectations. Stored value and payment services such as Venmo have been able to capture significant mind share by developing interactions for users that replicate the ones they perform the most – making it as easy to make financial transactions as it is to interact with friends on Facebook.

To keep pace with this kind of shift, financial institutions need to look to embrace those experiences and interactions that mirror the intuitive, familiar, and effortless usage patterns of other mainstream digital products. Examine your own digital properties and start to think about the kinds of subtle changes that might align them more closely to other well-known tools and experiences. Simplify and make interactions more intuitive.

Informed Decisions at a Moment’s Notice

Making sense of the endless stream of data that finance executives face each day is a daunting proposition, but it’s the ability to ingest, parse, and take definitive action on this information that has defined success for almost every business in the digital age. Everything from the market itself, to political news, to governmental, regulatory, and compliance updates, to social media, must be seen, understood, and weighed for importance and impact. Add in the need for real-time course correction, and it becomes an extraordinarily challenging task for an individual to undertake.

To realize ongoing success, banks and credit unions must make rapid decisions – and have the visibility and insight into the business to do so with full confidence. This kind of coordination requires strong connections throughout the business, along with the right alignment through governance and approvals within the organization.

The individuals making those high-impact calls must have all the necessary information at their disposal to correctly understand the landscape of those decisions, and their immediate ramifications. The insight has to be available to them anywhere, at all times, on any device.

Luckily, there are solutions – and entire fields of developing technology – that can assist in this effort, better and more effectively than ever before. Data analysis and business insights that drive constantly-updating dashboards feed executives with the pertinent information they need, and provide ways to take immediate action on those decisions, creating communication channels and enabling successful outcomes. Identify the types of critically actionable information that are most important to the success of your business and begin visualizing how these elements should be presented for maximum value.

Operations at Peak Speed and Efficiency

While smaller, nimble companies offering disruptive financial products aren’t supplanting the need for large banking institutions overnight, there are distinct operational lessons we can glean from their core processes and methods. Adopting a growth mindset as it pertains to how business can be performed opens even the largest institution up to new possibilities as innovation and efficiencies are discovered.

Some financial institutions have adopted an M&A strategy as a means to mitigating the pace of change, but that has its limits, and carries a different set of risks. Building internal processes and creating a structure to examine, absorb, and react to change is a foundational need for any business. Agile principles – with their origins in software development, but applied in multiple dimensions of organizational design – are core to developing the ability to navigate the shifting tides of any market, and are well-suited to the rapid changes in the financial sector.

Agile approaches allow a business to operate more quickly to develop and release digital products, but it also enables the flexibility within those streams of work needed to pivot and respond correctly to changes in the market, customer expectations, or anything else that impacts the business. This understanding, and acceptance, of change must permeate throughout the organization however. Finance, legal, marketing and everyone else needs to be on board with the philosophy to fully realize its potential.

And, once the right processes are in place, Agile also enables businesses to foster innovation potential by providing support for exploration alongside business-as-usual operations, leading to new opportunities for disruptive entries into the market. Begin connecting the individuals within your organization that will need to buy in to a process shift and have discussions around the need to evolve the way decisions are made.

Automation Unlocks New Value

The complexity of business continues to increase, and with it, human ability to process and adapt to those changes inherently decreases. Mistakes can be costly, and with lengthy implications. And as the pace of change accelerates – and businesses extend their reach into new markets – the threshold (and tolerance) for error shrinks.

Automation of these processes has now reached a point where not only is it possible to solve for these friction points with a technological solution, but it is in most cases more valuable to the business to do so. One area of automation that suits financial institutions in particular is the handling of a variety of document and data types that must be captured, processed, and understood by the business in order to conduct daily operations successfully.

Handwritten forms must match keyed entry in other systems, while scans of contracts combine typed and written input … and errors … can carry heavy burdens for the business if not identified and corrected. It gets complicated quickly, and remains one of the more arduous tasks we face each day.

Artificial intelligence is also a hot topic now, but the practical applications of this thinking today are no longer science fiction. Complex algorithms are created and trained to recognize and understand not only multiple input types, but where errors may appear. They can flag problems before they get replicated and carried through at a cost to the financial institution.

The more data these systems process, the more intelligently they can perform, learning from past pattern recognition. Robotics and machine learning will not necessarily replace all human staff – but instead may augment their ability to function at a high level and dedicate their time to new elements of business operations. Think about which repeatable, difficult, or otherwise challenging processes in your business could benefit from the streamlined gains automation can provide, and enable those most impacted by these changes to offer feedback and insight to improve efficiencies.

Financial institutions will continue to struggle in a rapidly-changing technological environment without the organizational thinking in place to evolve alongside their customers and the expectations of the market. The right technology team and partnerships can provide executives with the strategy and road map to realize measured, ongoing success and create innovation opportunities along the way. In connecting an understanding of the customer to business insights through the adoption of new processes and increased efficiencies through automation, financial institutions – no matter where they are currently in their technical digital maturity – have the ability to grow and change in profound ways.

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